Tesla will tap local debt to fund $2 billion Shanghai Gigafactory:…

NEW YORK (Reuters) – Tesla Inc said on Wednesday that it would raise capital from Asian debt markets to fund the construction of its third “Gigafactory,” which will be located in Shanghai and cost an approximate $2 billion. FILE PHOTO: SpaceX founder Elon Musk pauses at a press conference following the first launch of a SpaceX Falcon Heavy rocket at the Kennedy Space Center in Cape Canaveral, Florida, U.S., February 6, 2018. REUTERS/Joe Skipper/File Photo In the electric vehicle maker’s second-quarter earnings statement, published after the market close, Chief Executive Elon Musk said that he expected much of the car assembly plant to be “funded through local debt.” On the conference call following the earnings release he said: “For China I think our default plan will be to use essentially a loan from local banks in China and fund the (Gigafactory) in Shanghai with local debt.” The carmaker said in July that it had agreed with the Chinese government to manufacture vehicles in Shanghai, the first of its so-called Gigafactories to be built outside of the United States. The capital expenditure cost of Gigafactory 3 is estimated to be $2 billion, Musk said on the conference call. Tesla will need to raise debt because manufacturing challenges have left the company with a shortage of cash. Analysts said they believed Musk is turning to Asian markets because it is unlikely he would have been able to secure the sort of favorable terms from U.S. bond investors he did for his $1.8… [Read full story]